Putting the Circular Economy to Work: Measuring Gross Employment Effects in the Netherlands,1996-2015

A circular economy (CE) is generally regarded as a transition-facilitating economic system that has ecological and sustainable benefits due to lower resource dependence. However, the magnitude and importance of CEs is debated in the burgeoning empirical literature, which suggests that the CE typically provides between 0.5% and 5% of national employment. Likewise, it remains unclear whether and how CEs have grown in recent decades. In this study, we argue that current estimates of CE size are too focused on the core ‘green’ portion of a CE and overlook (1) non-‘green’ direct circular jobs that enable a CE’s development and (2) indirect circular jobs that support direct circular jobs. Using value-chain conceptualization, detailed micro-data on establishment-level activity, and input-output data, we empirically assess the number of direct and indirect CE-related jobs in the Netherlands for the 1996-2015 period. We find that our estimates of CE employment are higher than previous studies have suggested, indicating that these studies might have underestimated gross CE employment by focusing only on ‘green’ jobs. In addition, we find that within the CE, the number of enabling and indirect jobs is growing much more quickly than core ‘green’ jobs. Our findings have important implications for economic, spatial and social policy discussions regarding CE development.